If you live in Nairobi and you have
observed keenly, you may have noticed a sudden influx of visitors to the city
this week. You may also have noticed certain areas that have been discreetly
cordoned off, and others where the cordons are more overt. The World Trade
Organisation 10th Ministerial Conference starts today in Nairobi, and thousands
of delegates are in town to take a stab at the intractable issues of trade, agriculture,
market access, trade in services and the like.
On the whole, a global conference coming
between Jamhuri Day and Christmas, which mostly involves foreigners, and whose
process and language is often impenetrable, bypasses most of us. This is especially
when the working document includes language such as this: ‘The G33 has submitted two papers on the SSM in the context of MC10.
These are contained in documents JOB/AG/44 and JOB/AG/49 dated 19 October and
18 November 2015, respectively. These proposals seeking a ministerial outcome
on the SSM specifically touched the following four areas: (i) special
dispensation for LDCs and SVEs; (ii) product coverage; (iii) remedies breaching
pre-Doha bindings, and (iv) application and duration of volume SSM.’ Even
seasoned negotiators’ eyes may glaze over, but these talks are important for
very many reasons, and the fact that they’re happening here in the capital city
should give us an opportunity to look at trade issues much more carefully.
Global trade is the glue that holds the
world’s economic system together. There is no single country in the world that
can produce all the goods and services that its citizens need to survive,
thrive and develop. Autarky – where a country can produce all it needs within
its borders – has often been the fantasy of extremist politicians and economic
planners, but it doesn’t happen in reality, and even countries such as North
Korea lean heavily on China for their economic survival.
The problem with global trade is that every
nation tries to secure an advantage for itself, and the attempt to do so has
natural limits. In addition, different constituencies within the country’s
economy have different reasons to distort global trade – to either ask for
protection from the world, or to demand that other markets be prised open for
them.
Lest you think this is all esoteric, we
were given the perfect lesson about global trade back in June and July this
year, when there was an explosion of political sentiment around sugar imports.
Setting aside who was right and who was wrong, and whether all sides were
putting out verifiable truths, what happened then was the perfect micro-lesson
in global trade theory, in all its intractable glory.
First was whether Kenya was right in
allowing sugar from other countries into its markets. Under trade rules drawn
up by the Common Market for Eastern and Southern Africa, a body in which Kenya
is one of the strongest members, sugar was supposed to be imported freely into
the country, as long as it was manufactured in another member state. Kenyan farmers
had sought protection from this free flow, arguing that they needed time to
ensure that they would be as efficient – and thus as low-cost – as producers
from countries such as Sudan and Uganda. When President Kenyatta announced that
sugar from Uganda would come into Kenya under these open rules, the outcry was
deafening, and included accusations of his attempt to kill the livelihoods of
an entire group of peasant producers. These complaints would be familiar to any
observer of agricultural politics. Farmers in France have made it an annual
tradition to barricade Paris with their tractors, often spilling milk in the
streets and becoming a nuisance to protest any attempt at removing farming
subsidies, and thus opening them up to genuine global competition.
The other issue exposed was whether Kenya,
a net exporter to the region (primarily in manufactured goods), and thus a
beneficiary of more open trade, could afford to close off one part of its
markets. How could the country increase its standing in regional trade, while
still taking into account, and protecting the rights of, vulnerable farmers?
The issue was never properly resolved. Only last week, the country received a
one-year extension of COMESA protections, meaning that farmers had another
twelve months to enjoy the coddling of a closed market, while hopefully working
furiously to ensure that when the barriers are removed, they can compete on the
same cost base as producers from other countries.
The issues negotiators will be dealing with
in Nairobi for the next four days are of similar nature, except they are much
more intractable, of much longer standing, and with much more powerful
constituencies and forces behind them. Inasmuch as the global economy depends
on resolution of these issues, don’t hold your breath for a comprehensive deal
come Friday afternoon.
So expect to see our bright-eyed visitors
on the streets of Nairobi looking progressively more haggard as the week goes
on. But in true Kenyan fashion, make them feel at home.
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